Backed by former U.S. energy secretary and Texas governor Rick Perry, AI power startup Fermi went from nonexistent to an October IPO with a mammoth $16 billion market cap in less than a year without any announced customers or construction—or even a single dollar of revenue.
It's a Texas political insider family affair.
Founder Rick Perry's son Griffin is an executive and fellow founder Toby Neugebauer is the son of former Congressman Randy Neugebauer.
Neugebauer ran a conservative fintech that imploded. Red Team TechGods backed him before blaming Neugebauer for bankrupting Glorifi. Neugebauer countersued. WFAA.com noted "a spokesman for Ken Griffin called Neugebauer's allegations 'fabricated nonsense.'"
Fermi America's Matador Project is on a 5,236 acre site leased from Texas Tech University. It will use both local water and power. Initial water use is up to 2.5 million gallons per day, increasing up to 10 million as the project advances.
Initial electrical power will be met by gas turbines and the local electrical utility. The State of Texas granted preliminary approval for 6 gigawatt natural gas generated power.
Fermi's SEC filing noted:
Through a combination of natural gas turbine purchases, a focus on procuring other long lead-time equipment, and negotiations with Southwestern Public Service Company (“SPS”), the local utility, we expect to secure approximately 1.1 GW of power for our operations by the end of 2026 (including an expected 200 megawatts (“MW”) from our expected contractual arrangement with SPS).Fermi will need 18.2% of its power to come from the same source as Amarillo residents. That is all new demand.
The U.S. Energy Information Administration projected Texas energy "demand will rise another 14% in the first nine months of 2026."
The SEC filing said this about water:
Project Matador’s groundwater lease with the Texas Tech University System (the “Groundwater Lease”) includes dual-aquifer fresh and salt water rights, which provides a resilient, scalable water supply for cooling and other operations. Project Matador is located directly above the Ogallala Aquifer. Within Groundwater Management Area #1, which includes eighteen of the northernmost counties in Texas, the Ogallala Aquifer had an available volume of 3.19 million acre-feet per year as of 2020 and is expected to have approximately 1.99 million acre-feet per year availability in 2080 according to the Texas Water Development Board Groundwater Division.
Add aquifer depletion to the AI "public cost" list.
Another interesting interlock is Rick Perry's role as Fermi America co-founder and Board position with natural gas pipeline company Energy Transfer. Energy Transfer is supplying the gas to Fermi per an October 2025 announcement.
Fermi America™, developing the world's largest, behind-the-meter artificial intelligence private grid campus with the Texas Tech University System, has secured an agreement with Energy Transfer, one of the largest and most diversified midstream energy companies in North America, to deliver firm natural gas supply to Fermi's HyperGrid™ campus located outside Amarillo, Texas.The press release did not mention Rick Perry's conflict of interest in this deal.
Conflicts of interest are so yesterday. They are the fabric of today's PEU world, occupied by private equity underwriters (PEU) and their new TechGod/CryptoBro brethren.
Political Red and Blue Team supporters should be prepared to shoulder the financial burden for former elected officials and their sons with Fermi America as they purloin water, power, land and avoid their tax responsibilities. Subsidies are required for the wealthy and connected. Texas politicians know how to deliver for their brethren and their children.
Eventually the four nuclear plants referred to as "the Donald Trump Generating Plant" will produce electricity and toxic waste. I thought Trump II was already at maximum toxic production. Wrong again...